Important Information About FHA Loan Requirements

October 5, 2011 · Posted in Mortgages 

Applying for a mortgage for a new home can be a trying time. You will speed up the process by being pre-approved for a specific limit. The FHA loan requirements will vary from one state to another but the basic necessities are generally the same.

You must state the form of residence you want to purchase. This can be a single family home or a home with multiple units such as 2, 3 or 4 unit properties and it also included condominiums. This means you can buy apartment buildings with this form of credit.

Your application cannot exceed the statutory limits of your state. These will vary from state to state and sometimes from county to county so it is recommended that you check with your local realtors to see what the limits are. Also, these amounts may change with the interest rates so it is best to check these amounts often.

One of the best benefits of this program is the fact that you have a minimum cash investment in your home. Sometimes a large lump sum is difficult to come up with. FHA only requires a three percent investment from you.

Income needs are a little stricter than conventional lenders require. You have to have at least two years of steady employment with a steady increase in income and your mortgage cannot be more than thirty percent of your gross salary.

Credit score is important too. You should have a score of 580 to 620 to be approved. Your payment record cannot have more than two 30-day late payments and if you have prior foreclosures or bankruptcies they must have been discharged three and two years prior respectively with perfect credit since discharge.

The home you choose must be appraised by a government approved appraiser. Minor issues are not important but more serious ones must be repaired before you can be approved. Read more about: fha loan requirements

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